wcaseym (42.39)

Ozonomics

0

... I [Greer] spent the weekend reading through economics textbooks. “Thriller” is not exactly the word I’d use to describe these hefty tomes, but I’d recommend that anyone concerned with the future of our society ought to read at least one. This is not because current economic textbooks offer useful guidance to the challenges of our time. Quite the contrary; the world they describe is as imaginary as Oz, and rather less relevant to contemporary life. What makes them important is precisely that so many of the decision makers of our time treat this fantasy as reality.

The problem with a lot of academic economists (e.g., the ones who advise policy makers) is that they focus almost exclusively on the theoretical. They live in a world of contrived models where all variables except one or two are held constant and then they claim that any changes and the observed effects will translate cleanly to the real world.

In my opinion, economists who should be advising policy makers are the empirical or applied economists. Their work is more art than science, and you wind up relying on hunches and "gut feelings," but at least it is somewhat connected to reality.

This does not mean that there is no valid role for the academic economists. There is, and they have contributed greatly to the base of knowledge. The problem that politicians and policy wonks fail to grasp is that the difference between theory and practice is much greater in practice than it is in theory.